BMW and Qualcomm promote their software program collectively

Munich It’s a deal that goes well beyond the automaker’s usual collaboration with the chip company: This spring, BMW and Qualcomm joined forces on automated driving. “It’s about building a new business for us,” Qualcomm’s head of automotive division, Nacoul Dougal, told Handelsblatt.

Over the next three years, the partners want to jointly develop a suite of automated driving programs. What distinguishes the agreement is that the Munich-based car manufacturer BMW will not only use this technology in its models. Qualcomm, an American semiconductor supplier, sells technical expertise to other brands and vehicle suppliers worldwide.

“It is important for us to not only have a supplier, but also to have a partner. He is excited to continue improving things so that we can become constantly more competitive. Among other things, he is responsible for automated driving at BMW,” said Nikolai Martin, BMW Director. .

Thus, BMW is more closely associated with Qualcomm than it is with Volkswagen. Like BMW, VW recently chose chips from the American company. However, Europe’s largest automaker is developing an automated driving program with supplier Bosch.

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On the other hand, BMW sees an alliance with Qualcomm as the most promising way. “We’ve been looking at this in detail for about a year,” Martin says. “We combine intellectual property with knowledge and experience as well.” The project is not a classic customer-supplier relationship, but a real collaboration.

Intel out, Qualcomm takes over

The suite of joint programs is based on technology developed by BMW over the past decades. “That’s the key,” Martin says. There are also apps from Arriver, a Swedish specialist in driver assistance systems that Qualcomm acquired this spring. Qualcomm, the world’s largest smartphone chip provider, is contributing semiconductor knowledge.

The sites of the two companies are involved from San Diego to Shanghai. More than 800 BMW engineers and software developers work in teams of more than 400 Qualcomm specialists. However, both sides do not comment on how to split future sales of the program. With Qualcomm handling the sales, the bulk should remain with the Americans.

>> Read here: The chips: Supply bottlenecks are slowly disappearing – not just with cars

For BMW, marrying Qualcomm also means moving away from Intel. For automated driving, the Bavarians have relied on chips from the US group and its subsidiary Mobileye in recent years.

In 2017, BMW announced a development cooperation with the Intel division of Israel. The company’s seventh series, which has just been completely overhauled, is controlled by chips from Mobileye and Intel. In the next few years, Dax Group will continue to use components of what was once the world’s largest chip factory.

But BMW’s Silicon Valley group was shut down after the deal with Qualcomm: In future generations of electric cars, BMW talks about the ‘new class’, and the group will rely on Qualcomm from the middle of the decade – a joint programme.

It will provide attractive functionality, energy efficient and also very competitive in terms of unit costs. “So, the solution should be interesting not only for us, but for others as well,” Martin explained. Energy consumption is especially important. Customers cannot be informed if autonomous driving systems will one day require more power from the engine.

Ultimately, the partners want to offer some kind of scheme for automated driving. To do this, they also create a reference architecture for sensors and computing power that customers can build upon. “It’s about developing a highly scalable product,” says Dougal, Principal of Qualcomm. Americans are accustomed to large amounts of smartphone trade.

Qualcomm takes its time

Important to BMW: Qualcomm has already demonstrated that the group is willing to patiently build new business. Duggal has been leading the automotive division since 2011. To this day, the business is of little importance internally. In its most recent fiscal second quarter, the division generated $339 million in revenue. This represents only three per cent of the group’s revenue.

But the division is developing dynamically. Compared to the previous year, revenue increased 41 percent. In addition, more significant growth appears imminent: According to the company, the company currently has orders from the auto industry worth more than $16 billion on the books.

Peter Fentel, chip expert at consultancy Capgemini, applauds the American group’s good sense of automakers’ sensibilities: “It looks like Qualcomm is looking for a partnership to get into the auto industry.”

The drawing

However, he also points out that it is quite clear whether the alliance with BMW can really prevail in the market. Many companies are now developing such software, but the number of clients is very limited. Interesting buyers are, above all, the ten largest car manufacturers in the world.

Ultimately, Ventel believes that a few of the dominant software platforms will prevail. The competition is intense.

>> Read here: The Chip Paradox: Why Business is Booming and Stock Prices Suffer

“Ultimately, it will come down to who offers the best software modules at the best costs. In any case, our software runs on all the chips,” says Matthias Beilin, head of autonomous driving at the world’s largest car supplier Bosch.

BMW and Qualcomm initially want to work together up to the third level of automated driving. At this level the driver can lean back and no longer have to steer themselves, but be prepared to steer again with advance warning. However, it is quite possible to expand the cooperation to level 4, according to BMW director Martin.

Then BMWs with Qualcomm chips can drive completely autonomously on the highway.

The drawing

more: The chip industry is growing fast – but managers are getting nervous

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